What are the benefits of cloud accounting?
January 15, 2024
Just like desktop spreadsheets have replaced paper record-keeping. Cloud accounting is replacing desktop spreadsheets as the preferred way to store your businesses financial information.
This is no fluke. Cloud accounting offers many benefits over more traditional spreadsheets and software. These include saving time, improving accuracy, and increasing security.
In this article we take a look at a few of those key benefits.
What is cloud accounting?
Firstly though, what do we mean by cloud accounting?
We can think of cloud accounting a bit like internet banking. In the old days we received our banking information by paper. However now, most of us simply log into our online banking account to view our key financial information.
Cloud accounting is very similar. Rather than having all your accounting information saved on your computer in a spreadsheet or on a paper copy, it is stored online instead. This means you can access your data from any device, anywhere and anytime you like.
What are the benefits of cloud accounting?
We are delighted to have Xero embedded throughout our processes and ways-of-working at RA Accountants. This helps us deliver an accurate, efficient and compliant service for our clients.
Judith Moor, RA Accountants Senior Client Manager and Xero Ambassador
Financial information at your fingertips
One of the key benefits of cloud accounting, is having your financial information at your fingertips.
You can access your cloud accounting software anywhere, anytime and on any device via your secure login. You simply login to your account from any web browser or an app on your phone.
This can result in a massive improvement in accessibility over spreadsheets or software that is saved locally on a computer.
Cloud accounting is one of the most secure ways to store your financial information. Most cloud accounting software encrypts your data, like a bank. This means only people with an approved login can view the data.
In some ways cloud accounting is even more secure than storing your data on a computer. For example, if your laptop is stolen, no one will be able to access your cloud accounting account unless they also have your cloud accounting login.
Likewise, if your premises are ever damaged, in a fire or natural disaster, your financial information will be safely secured offsite.
Finally, you can decide who has access to your financial data. You can invite users to your cloud accounting account and control the level of access that they have. This can be more secure than sending out your data by email or on USBs.
Multiple people in your team can access your cloud accounting software simultaneously. This means you, your team and your accountant can simultaneously see the most up-to-date view of your accounts and input new data.
This can increase your speed and efficiency as you don’t have to access software one at a time. This is especially important with the working from home trend.
Greater automation & ability to integrate with other platforms
Cloud accounting gives you the ability to have greater automation in your financial processes.
Your cloud accounting software can be linked to your bank to reduce the need to transcribe information and reports can be scheduled to be generated automatically.
You can also integrate your cloud accounting software with other platforms (for example Paypal or Stripe) to allow a seamless transfer of data between your different software providers.
Greater automation and integration can reduce the chances of errors occurring. We are all human and there is always the chance of mistakes slipping in when we are involved in data input. Automation reduces the ‘human’ from the process and therefore minimises the chance of mistakes being made.
At the same time, greater visibility over your accounts also means if an error does occur, with cloud accounting it is easier to spot the mistake before it becomes an issue.
Tools within cloud accounting can assist compliance. With cloud accounting producing accurate financial statements, quarterly tax estimates and yearly tax returns is a simpler process, so helping business owners avoiding errors which could prompt audits or fines.
In the case of RA Accountants we have even worked with Xero (a cloud accounting software provider) to tailor their workpapers product to our specific needs. This has given us an even greater compliance level within the business.
Good for your business, good for the environment
Not only is cloud accounting good for your business, but it can also reduce the amount of paper and ink used in your business operations. Giving the planet (and your wallet) a helping hand. A happy planet is important for a happy business.
No need to keep software up-to-date
Unlike computer-based software, cloud accounting doesn’t need be regularly updated. Instead, updates are made by the software provider so you simply see the latest version whenever you login to the system.
How to implement Cloud Accounting software
We always suggest having a discussion with your accountant to see if cloud accounting software is right for you, and the best path for implementation.
RA Accountants is a Platinum Partner with Xero Cloud Accounting – the top level of the Xero accreditation scheme. This means if you are looking to implement cloud accounting software in your business, we have the expertise in our business to help you make the most of Xero software.
If you wish to implement cloud accounting software in your business, we are here to help.
We offer a complimentary, initial online consultation to discuss your personal circumstances and to see how we can help. Get in touch to book your appointment today.
These articles are for guidance only and professional advice should be obtained before acting on any information contained in them.
No responsibility can be accepted for loss occasioned howsoever to any person as a result of action taken or refrained from as a result of reading.